Correlation Between Newgen Software and AVALON TECHNOLOGIES
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By analyzing existing cross correlation between Newgen Software Technologies and AVALON TECHNOLOGIES LTD, you can compare the effects of market volatilities on Newgen Software and AVALON TECHNOLOGIES and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Newgen Software with a short position of AVALON TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newgen Software and AVALON TECHNOLOGIES.
Diversification Opportunities for Newgen Software and AVALON TECHNOLOGIES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Newgen and AVALON is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Newgen Software Technologies and AVALON TECHNOLOGIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVALON TECHNOLOGIES LTD and Newgen Software is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Newgen Software Technologies are associated (or correlated) with AVALON TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVALON TECHNOLOGIES LTD has no effect on the direction of Newgen Software i.e., Newgen Software and AVALON TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Newgen Software and AVALON TECHNOLOGIES
Assuming the 90 days trading horizon Newgen Software Technologies is expected to under-perform the AVALON TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, Newgen Software Technologies is 1.2 times less risky than AVALON TECHNOLOGIES. The stock trades about -0.06 of its potential returns per unit of risk. The AVALON TECHNOLOGIES LTD is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 57,350 in AVALON TECHNOLOGIES LTD on August 29, 2024 and sell it today you would earn a total of 33,240 from holding AVALON TECHNOLOGIES LTD or generate 57.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newgen Software Technologies vs. AVALON TECHNOLOGIES LTD
Performance |
| Timeline |
| Newgen Software Tech |
| AVALON TECHNOLOGIES LTD |
Newgen Software and AVALON TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newgen Software and AVALON TECHNOLOGIES
The main advantage of trading using opposite Newgen Software and AVALON TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newgen Software position performs unexpectedly, AVALON TECHNOLOGIES can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AVALON TECHNOLOGIES will offset losses from the drop in AVALON TECHNOLOGIES's long position.| Newgen Software vs. Reliance Industries Limited | Newgen Software vs. Life Insurance | Newgen Software vs. India Glycols Limited | Newgen Software vs. Indo Borax Chemicals |
| AVALON TECHNOLOGIES vs. Reliance Industries Limited | AVALON TECHNOLOGIES vs. Life Insurance | AVALON TECHNOLOGIES vs. India Glycols Limited | AVALON TECHNOLOGIES vs. Indo Borax Chemicals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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